Varo Bank Review: Stellar Neobank With No Hidden Fees
Written by
Preston Hartwick
Edited by
Melanie Grafil
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
GOBankingRates Score
Varo
-
Checking Accounts
4.0
-
Savings Accounts
4.8
-
Credit-Builder Card
5.0
-
Banking Experience
4.5
Pros
- Build credit with the zero-interest Varo Believe card
- Customer support is available seven days a week
- No minimum balance or monthly fees in checking or savings accounts
- High APY on savings accounts up to a limit
Cons
- No physical branches
- There are cash deposit limits.
- Not as many financial products or services as traditional banks
- Limit on savings rate
Varo Overview
Varo is an online neobank that was founded in 2015 and is headquartered in San Francisco. In 2020, it became the first consumer fintech company to be granted a national bank charter.
Even though the company is completely online, your accounts are still FDIC-insured up to $250,000 per account, so you can be sure that your funds are secured.
Where does Varo stand out? No monthly fees, high interest rates for savings accounts, and an interest-free credit-building card make Varo an excellent choice for people looking to make the most out of their savings and plan for the future.
As a result, GOBankingRates has ranked Varo among the Best Neobanks of 2024.
Varo Review: Key Features
Some of Varo’s most popular products are highlighted below.
Checking Account
Varo’s checking account comes without any minimum balance requirements or minimum initial deposits. The only prerequisites are that you are over the age of 18 and hold a state-issued ID and social security number. If you meet these requirements, you are good to go, making Varo a frictionless banking experience for new account holders.
Every checking account is paired with a Visa debit card that can be used to withdraw cash and make online and offline purchases. It also offers cashback benefits at selected retailers. Another great feature is that there are no fees for international transactions, making it the perfect card to take on your next trip.
For ATM transactions, Varo has partnered with Allpoint, which means you have access to a fee-free nationwide network of over 40,000 ATMs. If you use an out-of-service ATM, the fee will be $3.50.
Thanks!
However, like other digital banks, making cash deposits with Varo is not a straightforward experience. You can only deposit up to $1,000 per day at Green Dot locations, where you may be charged additional fees.
Savings Accounts
Varo savings accounts also feature no monthly fees or minimum balance requirements. But by far the best advantage is the high-yield interest rate.
It works like this: you get APY on your first $5,000 dollars, and on anything above that as long you meet these requirements:
- Receive direct deposits totaling at least $1000 per month.
- End the month with a positive balance in both your checking and savings account.
Even if you don’t meet these requirements, you will still earn APY on the entirety of your balance, which is much higher than many other savings accounts out there.
To help you save more, Varo offers two savings features. The “Save Your Change” feature will automatically round up all debit card checking account purchases and deposit the leftover cents to your savings account. The second is called “Save Your Pay,” and allows you to preset a certain percentage of the deposits in your checking account to be automatically put into your savings.
Varo Believe Credit-Builder Card
Varo offers a credit-building secured credit card that is linked to your Varo Bank Account balance. Simply transfer money into your Varo Believe Secured Account to set your limit.
To qualify for the card, you need to have a pre-existing Varo account with no negative balance and have received at least $500 in the last 90 days. No credit checks are conducted before issuing the card, so bad or no credit history is not a barrier.
Unlike many secured credit cards, the Believe credit-building card doesn’t have deposit fees, monthly fees or annual fees. Most importantly, it features 0% interest, since you can only use the existing money you have in your account. Since all transactions are reported to the three main credit bureaus, it’s an excellent opportunity for building credit without risking more debt. Last, but not least, you can track improvements to your credit score through the app.
Banking Experience
Overall, most of Varo’s users are very happy with their online banking experience. It has earned a 4.9-star rating on the Apple App Store and a 4.7-star rating on the Android App Store.
The features that most customers love are the credit-building tracker as well as the easy-to-use interface. The main issue that comes up is that the customer service chat is only available until 4:30 p.m.
Comparable Neo Bank Options
If you’re looking for an alternative to Varo, check out these two options.
Chime
Varo is quite similar to Chime* in that it is all online and offers simple banking services with low fees as a selling point.
Both have checking and savings accounts, as well as a credit-building card with no fees. However, neither of them offers many additional services.
In terms of APY, neither bank offers interest rates on checking accounts. However, the APY1 is higher on Varo’s savings account. Chime offers on its account, while Varo offers or depending on whether the requirements are met.
Chime has a higher number of free-to-use ATMs2 and over 9,000 locations where cash can be deposited without any fees3.
SoFi Bank
Like Chime, SoFi is another online bank that has many of the same benefits as Varo, but offers much more in terms of services, including loans, mortgages, investing, business financing, and insurance.
Another feature in which SoFi comes out ahead is that they also offer a APY on checking balances. Their APY is in line with Varo’s or as well.
Final Take
If you are looking to simplify your finances, then Varo might be the neobank for you. It is an easy-to-use and straightforward app with great ATM access, amazing interest rates on savings accounts, and a credit-building credit card. There are plenty of positives to be had here.
If you are just stepping into the world of personal finance or are looking to have a fresh start, you may find that Varo offers all of the products and services you need. However, if you are in the market for more comprehensive banking services or an in-person banking experience, this might not be exactly what you need.
Varo Bank FAQs
Here are more answers to some commonly asked questions about Varo Bank.- Is Varo a safe bank?
- All accounts are protected by FDIC insurance and are guaranteed up to $250,000.
- Is Varo a registered bank?
- Yes, Varo is a registered bank and has been granted a national banking charter.
- Who is Varo for?
- Varo is best for people who want to earn high interest on their savings accounts or for people with poor or no credit who want to improve their credit score. As long as you don't need access to a physical branch, Varo provides competitive products and services compared to traditional banks.
Compare to Other Institutions
Daria Uhlig, John Csiszar and Brandy Woodfolk contributed to the reporting for this article.
To determine rankings for the Best Neobanks, GOBankingRates looked at the following factors: (1) monthly checking fee ratio (percentage based on the minimum to avoid the fee compared to the monthly fee itself); (2) minimum needed to earn APY; (3) savings APY; (4) products/services offered (credit cards and investment services); (5) the average mobile app rating between the Android and Apple app stores; and (6) number of extra benefits and perks unique to neobanks. All factors were then scored and combined, with the lowest score being the best. Factors (1) and (2) were weighted 0.5 times, and factors (3) and (6) were weighted 2 times.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Dec. 20, 2023.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
*Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC
1The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of September 20, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.
2Out-of-network ATM withdrawal and over the counter advance fees may apply. See here for details.
3There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
Is this your bank?
Take Advantage of our Best Offer(s)
